A regular economic bulletin on the Middle East that builds on a range of publications we publish on the global economy and various countries and regions.
We are delighted to present PwC’s first regular economic bulletin on the Middle East. It builds on a range of similar publications we publish on the global economy and various countries and regions. The goal is to present a few easily digestible insights that we hope will be of value for your business. We welcome any feedback on the kinds of topics you’d like to see us cover in the future.
Oil prices remain the dominant theme currently driving most Middle Eastern economies. Despite historic collaboration on output cuts by OPEC and non-OPEC exporters (extended to March 2018 at the 25 May meeting), global inventories remain stubbornly high and US shale output is rebounding.
As a result, prices still remain well below break-even levels for most oil exporters and fiscal reform and deficit financing will continue to be key policy priorities in 2017.
This environment creates challenges for business, such as managing new taxes. However, there are also opportunities, particularly as the major Gulf economies look for alternative sources of financing. This includes the debt markets and privatisation initiatives, most notably Aramco’s 2018 IPO.
There has also been growing interest in public-private-partnerships (PPP), with more countries developing supportive legislative frameworks and preparing project tenders.
PwC recently stepped back to take a long-term view in our World in 2050 report. Our forecasting exercise helped shed some light on what we call “pockets of opportunity”: smaller economies which also have bright prospects. In the Middle East, we looked initially at Egypt and Saudi Arabia, and this issue highlights their growth potential.
Source: PwC World in 2050